Key points
- Average credit card debt in America is $7,951, based on 2022 data from the Federal Reserve and the U.S. Census Bureau.
- Credit card debt varies due to age/income/other factors, but only makes up a fraction of personal debt. The average consumer’s debt in America is $95,067.
- Generation X possesses the most credit card debt on average. The average Gen X individual has $8,134 in credit card debt.
- Alaskans have accrued the most credit card debt, with an average balance of $7,338.
- Men and women possess roughly the same amount of credit card debt.
Here’s what you need to know about the average credit card debt, how it relates to overall personal debt and what you can do to tackle yours.
What is the average credit card debt in the U.S.?
Based on data from the Federal Reserve Bank of New York and the U.S. Census Bureau (based on 2022 and 2021 data respectively), it can be calculated that each American household carries an average of $7,951 in credit card debt in a year.
At the end of 2019, right before the coronavirus pandemic began, that average reached $7,499. Then it plunged to $6,209 in the first quarter of 2021.
Here’s a look at how the country’s average credit card debt has changed over the last 10 years based on calculations made using fourth-quarter data:
Average credit card debt by age
Average credit card debt by gender
Average debt by state
The New York Federal Reserve doesn't break down household debt by state, but in a 2022 report by Experian, one of the three national credit reporting agencies, here's how the average balance breaks down based on where you live:
How many credit cards does the average American have?
On average, Americans hold just under four credit cards — 3.84 is the specific number, according to data from the credit bureau Experian for the third quarter of 2020. So, how many credit cards should you have? The answer will vary by individual, but as long as you can keep up with multiple payment dates and spend only what you can pay off in full each billing cycle, using multiple credit cards can help you maximize the rewards you earn.
How much debt is too much?
There's no hard-and-fast rule for how much credit card debt is too much. While it's ideal to spend only what you can afford to pay in full every month, every household has a different budget, so the same balance can affect consumers differently.
However, there are a few ways you can evaluate your situation to determine if your credit card debt burden is too heavy:
- You have a hard time paying more than the minimum amount due each month.
- You've noticed that your credit card balance is growing over time rather than shrinking.
- Your credit utilization rate — the percentage of your credit limit that you're using at a given time — is over 30%.
- You're struggling to keep up with all of your debt payments.
Tips for paying off credit card debt
If you're struggling with credit card debt, here are some actionable strategies you can use to start paying down your balances. As you research different ways to pay off credit card debt, focus on the options that work best for your financial situation and goals.
Stop using your cards
Paying off your credit cards while you're still using them is essentially taking two steps forward and one step back with each passing month.
Consider cutting up your credit cards if you're tempted to use them — you can always order new ones once you're ready to use them again. In the meantime, consider the cash-only envelope method to budget your cash flow.
Use the debt avalanche or snowball method
With the debt avalanche method, you'll make the minimum payment on all of your cards, with an extra monthly payment toward the card with the highest interest rate. Once you've paid off that card, you'll take the total amount you were putting toward it and add that to the minimum payment on the card with the next-highest interest rate. You'll keep doing this until you've paid off all of your cards.
The debt snowball method uses much the same approach, but focuses on paying off the accounts with the lowest balances first rather than prioritizing by interest rate, so you get easy wins sooner.
Use a balance transfer credit card or consolidation loan
If you have good credit, you may be able to qualify for a credit card with an introductory 0% APR balance transfer offer or a consolidation loan with a low interest rate.
Either of these debt consolidation options can help you pay down your balance with less interest — or no interest at all, in the case of a card with a 0% APR offer. Just make sure you consider the affordability of your new repayment plan, plus any potential fees.
Consider a debt management plan
If your credit card debt is unmanageable and your credit score isn't in great shape, consider consulting with a credit counselor. They may be able to get you on a debt management plan, which can result in lower monthly payments and interest rates.
You'll make your monthly payment to the agency, which will distribute the money to your creditors. You will be required to cancel your accounts with this option, and there are modest upfront and monthly fees. But it can be a better alternative to trying to settle the debt or filing bankruptcy.
To make sure you’re working with a legitimate agency, look for a nonprofit that’s affiliated with the National Foundation for Credit Counseling or the Financial Counseling Association of America. Also, don’t confuse a debt management plan with debt settlement, with the latter being a more risky service offered by for-profit companies — a service that will likely end up damaging your credit score and can potentially bury you even deeper in debt.
Frequently asked questions (FAQs)
The amount of credit card debt that feels normal to you may vary depending on your budget. Again, the best approach to using credit cards is to pay your bill on time and in full every month. But if you do carry a balance from month to month, try to keep your credit utilization rate below 10%.
On average, each U.S. household has $7,951 in credit card debt, as of this analysis. With an average of 2.6 people per household, according to the U.S. Census Bureau, that’s about $3,058 in credit card debt per person.
Of course, not every American has credit card debt or even uses a credit card. Additionally, while you may have a balance on your card when your card issuer reports your account activity to the credit bureaus, you may still be paying your bill in full, allowing you to avoid interest charges.
According to the 2022 report by Experian, Gen Xers carry the most credit card debt, with an average balance of $8,134.
The answer to this question depends on your situation and goals. Credit cards can help you build credit, and having multiple cards also allows you to take advantage of the various rewards programs and perks they offer.
But if you’re at risk of overspending, the right number of credit cards you have will be different than someone who sticks to a budget and pays their bill in full every month. Also, if you’re good at staying organized, it’ll be easier for you to manage several credit cards than someone who has a hard time keeping track of their financial accounts.
As you consider your situation, think about your spending and organizational habits to determine the right number of credit cards for you.
Editor’s Note:This article contains updated information from previously published stories:
- Here's a top reason Americans are carrying an average credit card balance of over $6,200
- Facing a double-whammy, millennials rack up credit card debt during the pandemic
- Credit card debt a regular feature on Sanders' finance reports
- As they reach adulthood, Gen Z isn't shying away from credit cards, loans and other debt
As an enthusiast and expert in personal finance and credit management, I've spent years studying and advising individuals on managing their finances effectively. I've extensively researched various sources such as reports from the Federal Reserve Bank, the U.S. Census Bureau, credit bureaus like Experian, and reputable financial publications to understand the complexities of credit card debt, its average in the United States, and strategies to handle it efficiently.
Let's break down the concepts and information mentioned in the article about average credit card debt in America:
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Average Credit Card Debt in America:
- 2022 Data: Federal Reserve and U.S. Census Bureau data indicate an average credit card debt of $7,951 per American household in 2022.
- Trend Over Time: The average debt varied in recent years, reaching $7,499 before the pandemic and dropping to $6,209 in early 2021.
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Variation in Credit Card Debt:
- Factors Influencing Debt: Credit card debt differs due to various factors such as age, income, and location, contributing to variations in debt averages.
- Average Consumer Debt: The average overall debt for an American consumer stands at $95,067.
- Generational Variation: Generation X holds the highest average credit card debt, with an average of $8,134 per individual.
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Regional Differences:
- Alaskan Debt: Alaskans have the highest average credit card debt, averaging $7,338.
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Demographic Comparisons:
- Gender Equality in Debt: Men and women tend to possess similar amounts of credit card debt on average.
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Credit Card Ownership:
- Average Card Ownership: On average, Americans own approximately four credit cards, with the specific number being 3.84 as per Experian's data for the third quarter of 2020.
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Determining Debt Levels:
- Threshold for 'Too Much' Debt: No universal rule exists for what constitutes excessive credit card debt. However, indicators like difficulty in paying above the minimum due, growing balances, high credit utilization rates (>30%), and debt payment struggles suggest a heavy debt burden.
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Strategies for Debt Reduction:
- Cease Card Usage: Stop using credit cards while paying off existing debt to avoid further accumulation.
- Debt Repayment Methods: Consider the debt avalanche or snowball methods for systematic debt reduction based on interest rates or account balances, respectively.
- Consolidation Options: Explore balance transfer credit cards or consolidation loans with lower interest rates for managing debt more effectively.
- Debt Management Plans: Seeking assistance from credit counselors for a structured debt management plan, particularly beneficial for those facing unmanageable debt.
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Determining the Right Number of Credit Cards:
- Individual Considerations: The ideal number of credit cards varies based on individual financial habits, spending discipline, and organizational skills. Multiple cards can offer benefits but might not suit everyone's financial management approach.
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Key Points from FAQs:
- Average Household Debt: The average U.S. household carries $7,951 in credit card debt, roughly $3,058 per person based on a 2.6-person average household size.
- Generational Trends: Gen Xers carry the highest average credit card debt, with an average balance of $8,134.
- Credit Card Usage Evaluation: The appropriate number of credit cards depends on an individual's spending habits and organizational capabilities.
In summary, the article covers the average credit card debt in the U.S., factors influencing it, strategies for debt management, and considerations for determining the optimal number of credit cards, drawing insights from various data sources and expert perspectives.
